Is Medicare Advantage a Scam?

Medicare Advantage is also known as Part C

When you become eligible for Medicare you have the option of enrolling in Part A and Part B. Part A is usually premium-free and covers your inpatient services. Part B comes with a monthly premium and covers your outpatient services. Each of them also comes with deductibles.

Original Medicare does not have copays. Part B only covers 80% of your outpatient services. That means without any supplemental coverage you’re responsible for the 20% coinsurance for any of your outpatient services under Part B as well as other out-of-pocket costs in the form of deductibles under both Part A and Part B. In addition, nor Part A or Part B cover prescription medications you pick up at the pharmacy.

Don’t Forget:

“Medicare Supplemental Plans” and “Medigap plans” are the same thing with different names. They consist of the lettered plans like F, G and N.

This is where supplemental insurance options come into play. You can choose to enroll in either a Medicare Supplemental Plan (Medigap) to cover the 20% coinsurance as well as deductibles that come with Part A and Part B. Then you would enroll in a Part D policy to cover your prescription medications. Or, you can enroll in a Medicare Advantage plan, with or without prescription drug coverage.

Is Medicare Advantage a Ripoff?

Here is where it gets tricky… Medigap plans were created to work WITH Original Medicare Part A and Part B. Medicare Advantage plans were created to REPLACE Part A and Part B. With Medigap, your plan will cover anything that Medicare covers. No ifs, ands, or buts. With Medicare Advantage, you’re leaving Original Medicare and going with a private carrier who is getting paid by Medicare to take on your risk. Yes, they must cover the same services Part A and Part B cover, the caveat is they can CHOOSE how much they want to cover for that service.

How Coverage Works with Medigap vs. Medicare Advantage

If you get diagnosed with a serious illness, Medicare & Medigap will cover it. Depending on the letter plan you choose, you may spend zero out of pocket outside your monthly premium or maybe the Part B deductible, which currently is $198. All plans will cover the 20% coinsurance under Part B. Basically, you don’t have to worry about how much you’ll end up spending out of pocket as you use your benefits.

With a Medicare Advantage plan, if you get diagnosed with a serious illness, there is a real chance you’re going to hit the MOOP of $6,700. You have copays for every single visit, you have a limited network of doctors to choose from, your cost-sharing is much higher. They also require prior authorization for many services & surgeries. If you or your doctor don’t submit the paperwork properly because you didn’t know prior authorization was needed… guess who’s responsible for the cost. YOU!

Why Is There No Premium for Medicare Advantage Plans?

Why else would Medicare Advantage plans offer zero-dollar monthly premiums? How would they make money? They make money between Medicare paying them $1,000 a month to take on your risk and then charge you, the beneficiary, copays, and coinsurance for everything.

To summarize… supplemental coverage is always better than none. But, and this is a big but, if you can afford the premiums for a Medicare Supplemental Plan (aka Medigap), always go with that option. Medicare Advantage plans typically should only be if you cannot afford a Medicare Supplemental plan with a prescription drug plan and a Dental and a Vision plan and do you need a hearing plan too? See where this gets tricky? The real advantage in the Advantage plans is that they do give you money toward more services you would have to pay out of pocket for with a Medicare Supplemental plan.

Can You Go Back to Original Medicare from an Advantage Plan?

Maybe. If you go with a Medicare Advantage plan, realize it was not the coverage you thought it was, and try to go back to Original Medicare and get a Medigap plan, you may not ever be able to. There is a Special Enrollment Period called trial-rights where if they only had their Medicare Advantage plan for 12-months or less, they can switch back to Original Medicare and enroll in Medicare Supplemental plan (Medigap) without answering health questions. But if you are past this grace time then you will be subject to underwriting. This means that to get back to Original Medicare and a Supplemental Plan, you need to be in good health.

What Happened to the Medicare Advantage Disenrollment Period?

Remember the Medicare Advantage Disenrollment Period that went away? Well, they brought it back and named it the Medicare Advantage Open Enrollment Period. It runs from January 1st- March 31st every year. They had to bring this enrollment window back because so many beneficiaries were enrolling in an Advantage plan during AEP in the fall, went to use their benefits in January, and realized it was not the coverage they wanted.

Can I Change My Medicare Advantage Plan After Open Enrollment?

You can change your Medicare Advantage plan after the Annual Enrollment Period ends and the Medicare Advantage Open Enrollment Period begins on January 1st. This enrollment window ends on March 31st.

Why Are There So Many Ads for Medicare Advantage Plans?

The commercials that are all over the TV during the Annual Enrollment Period always make me so mad. “All my Medigap plan cares about is their premium, but my Medicare Advantage plan has zero-premium.” These commercials are what really misinform our Medicare community on their options. They insinuate that the best and only option is Medicare Advantage. Please don’t trust the TV commercials, the fine print is too hard to read and absorb and they are simply misleading.

What is the Truth About Medicare Advantage Plans?

The truth about Medicare Advantage plans is simple. They do help fill in gaps in Original Medicare coverage, but they have their own set of gaps in coverage as well as many limitations. Going with just Original Medicare leaves you vulnerable to high out-of-pocket medical expenses.

Here is the bottom line: If you cannot afford a Medicare Supplemental Plan (Medigap), then, enroll in a Medicare Advantage plan.